The Covid-19 pandemic has had an impact on a number of aspects of our society, primarily on the healthcare system and the economy but also on the real estate market. However, in spite of the economic recession caused by the health emergency, which has changed people’s housing needs, Italy’s real estate market is withstanding the negative impact of the pandemic and it is holding steady. As a matter of fact, not only Italians but also a considerable number of foreigners have purchased property in Italy in the last year, and there are good reasons to believe that the housing market will grow by driving the country’s real estate market in its entirety.

According to recent ISTAT estimates, in the third quarter of 2021 the House Price Index (HPI), which measures the evolution of market prices of all residential properties that are purchased by households, increased by 4.2% compared to the same quarter of the previous year due to an increase in both the prices of new dwellings and the prices of existing ones. This trend shows that people are committed to buying property, considering it a safe investment, especially in areas which are deemed to be the most sustainable to live in. Furthermore, investors’ attention is focused on both vibrant cities and small towns with charming historical city centers, or suburbs. In particular, the value of the latter has increased during the pandemic; in fact, small towns or suburbs offer better quality of life compared to crowded city centers which are characterized by constant traffic and air pollution. As a matter of fact, properties outside big city centers are more likely to have gardens, bigger balconies and other outdoor spaces to be dedicated, for instance, to remote working.

Over the last year many foreigners have decided to invest in the Italian real estate market making Italy the first choice among people from North America and the United Kingdom who wish to purchase a second house outside their home countries. Notably, a number of renowned real estate companies noted that they sold more properties in the first half of 2021 than in 2019.

Purchasing property in Italy is a good investment for a number of reasons. Firstly, Italy’s transaction costs are lower compared to other European countries such as Spain or Portugal. Currently, the interest rate on properties is still at historic lows, which makes purchasing a property a very good investment. Secondly, purchasing a property in Italy is a good investment if you plan on renting it, thereby generating passive income. Cities like Florence, Rome and other historic cities in Italy are very popular with tourists and many cities are also witnessing urban development and thus attracting new residents. Thirdly, the Italian government has introduced new policies regarding tax deductions and state incentives such as convenient rates on mortgages, reductions in the registration, mortgage and cadastral taxes, and other incentives. In particular, a number of deductions have been introduced to incentivize renovation works in order to increase energy efficiency levels in households. These deductions include the renovation bonus, the facades bonus and the 110% Superbonus, to name a few.

In conclusion, purchasing a property in Italy appears to be a good investment due to number of reasons including the major financial advantages to buying at the moment.  If you are thinking of purchasing a property in Italy and you would like more information about the purchasing process, the requirements to purchase a property and the best locations in Italy, our team of professionals can carry out a market analysis in order to identify the property that best suits your needs. Do not hesitate to contact us at info@italianrealestatelawyers.com.

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